Molecular biology and microalgal biotechnology have the potential to play a major role in improving the production efficiency of a vast variety of products including functional foods, industrial chemicals, compounds with therapeutic applications and bioremediation solutions from a virtually untapped source. Microalgae are a source of natural products and have been recently studied for biotechnological applications. Efficient genetic transformation systems in microalgae are necessary to enhance their potential to be used for human health. A microalga such as Chlarella is a eukaryotic organism sharing its metabolic pathways with higher plants. This microalga is capable of expressing, glycosylating, and correctly processing proteins which normally undergo post-translational modification. Moreover, it can be cultured inexpensively because it requires only limited amount of sunlight and carbon dioxide as energy sources. Because of these advantages, Chlarella may be of great potential interest in biotechnology as a good candidate for bioreactor in the production of pharmaceutical and industrial compounds for human functional foods. Here, we briefly discuss recent progress in microalgal transgenesis that has utilized molecular biology to produce functional proteins and bioactive compounds.